Four groups are identified among 113 Fortune 500 manufacturers that approach innovation quite differently. The groups are based on 27 measured elements of formal and informal organization, corporate strategy, and corporate environment. Both financial performance and product innovation differ significantly among the groups. A group of 42 firms that invest heavily in innovation perform the best financially, with a smaller group of firms that are not innovative but which follow a strategy of acquisition performing nearly as well financially. Firms that focus research resources on process innovation perform poorly, although process research complements product research among the effective innovators. Strong positions in growing markets, investment in research and development, open and creative structures, and supportive organizational climates are particularly important for explaining both product innovation and financial performance of these firms.